- US-China trade optimism dents JPY’s safe-haven status and provides a goodish lift.
- The USD regains positive traction and remained supportive of the positive move.
- Traders now look forward to the final US Q1 GDP print for some fresh impetus.
The USD/JPY pair built on its momentum further beyond the 108.00 handle and climbed to over one-week tops in the last hour.
A combination of supporting factors assisted the pair to continue gaining positive traction for the second consecutive session on Thursday and build on this week’s recovery move from multi-month lows.
Hopes of a fresh round of US-China trade negotiations propped up after South China Morning Post reported that the world’s two biggest economies have tentatively agreed to another truce ahead of the G20 meeting.
The latest development added to the overnight optimism led by the US Treasury Secretary Steven Mnuchin’s comments – though were restated later, describing progress in the US-China trade talks.
Renewed trade optimism provided a strong boost to the global risk sentiment, which was seen underpinning the Japanese Yen’s safe-haven demand and remained supportive of the ongoing up-move.
On the other hand, the US Dollar managed to regain traction amid expectations that a resolution to the prolonged US-China trade disputed would ease pressure on the Fed to cut interest rates immediately.
It, however, remains to be seen if the pair is able to capitalize on the positive momentum or meets with some fresh supply at higher levels as the focus now shifts to Thursday’s release of the final version of the US Q1 GDP print.
Technical levels to watch
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